At the time we did not have time to verify the information, but now that we have, as of Friday's COMEX close, gold is most decidedly NOT trading in backwardation.
Front month gold futures settled Friday at $1848.90, and every single month forward is trading in increasing contango (normal market condition), culminating in $2036 for the June 2017 contract.
While a significant gold backwardation (particularly in the nearby front months) WILL INDICATE gold COMEX/ system collapse is imminent, the fact that gold remains strongly in contango after its recent $200 price move indicates that traders are not yet concerned with either an imminent collapse in the dollar, or a COMEX gold default.
Contrast this with silver's structure, which does continue to trade in backwardation, with back months' discount continuing to increase daily.
|Daily Settlements for Gold Futures (FINAL)Trade Date: 08/19/2011|
|Prior Day |
Silver continues to trade in contango for roughly a year out, from front months through July 2012, and enters backwardation from the Sept 2012 contract on out.
The July 2016 contract settled Friday at $41.156, a $1.272 discount from front month of Aug 2011, which settled at $42.428.
As we have stated previously, the fact that silver's backwardation continues to worsen while gold remains in contango indicates that silver's backwardation is a result of COMEX SILVER DEFAULT RISK, and not fears of an imminent dollar collapse (or else gold would also be trading in backwardation).
|Daily Settlements for Silver Futures (FINAL)Trade Date: 08/19/2011|
|Prior Day |